January 10th, 2012

I’m used to politics and its dirtiness and hypocrisy, the misrepresentations one candidate routinely makes about the other. They all pretty much do it, especially in their ads. This does not surprise me.

But I can’t recall an attack that’s made me as angry as the one launched by Gingrich, and to a lesser extent Perry and Huntsman, against Romney’s record at Bain Capital. Before I even read this editorial in National Review (with which I agree), I was aghast when I saw some of their statements on the news last night.

Readers of this blog know that my preferred candidate this year is Romney. And not just because he’s more electable (although polls show he’s that), but because I think he’s competent, smart, conservative enough—and, very importantly, has an understanding of the business world that not only prospective opponent Obama lacks, but that Romney’s current Republican rivals lack as well.

As I said, I’ve seen one candidate unfairly misrepresent something about the other before; it happens all the time, although I never like it. But this one is different. I can’t recall a time when the attack featured statements that violated basic principles that the attacker and his/her party were supposed to stand for—such as, for instance, knowledge of what capitalism is and what sometimes happens when companies are failing. Any candidate who wants to run against the bailouts cannot attack Romney for what he did at Bain, which was to try to save failing companies by (among other things) cutting costs, which sometimes worked and sometimes didn’t, and to make money into the bargain. Any candidate who wants to appeal to people who would like a president who actually knows something about how business works cannot attack Romney for what he did at Bain (unless, of course, he was unethical in some way, which is not being alleged).

Newt Gingrich’s risible super-PAC factotum has gone to the length of producing a feverish little film about Romney’s tenure as a “corporate raider” at Bain. Governor Perry, for his part, told a Republican audience: “If you are the victim of Bain Capital’s downsizing, it is the ultimate insult for Mitt Romney to come to South Carolina and tell you he feels your pain — he caused it.” To appropriate Governor Perry’s favorite adjective, that is the ultimate in populist pandering, or something close to it.

Huntsman’s private-sector experience consists of having served as an executive at the firm owned by his billionaire father. Gingrich and Perry have between them about eleven minutes’ worth of relevant private-sector experience — Perry being subsidized by the federal government to farm cotton, Gingrich subsidizing himself by farming his political connections — and therefore may not know (or care) what a private-equity firm such as Bain does. (Gingrich might consider asking his friends at leveraged-buyout firm Forstmann Little, where he was on the board.) Bain is involved in, among other things, leveraged buyouts, meaning that the firm and its investors borrow money from banks to acquire companies, usually firms that are in trouble but believed to be salvageable. These firms generally are bought on the theory that they represent fundamentally sound underlying business enterprises that are for one reason or another performing deficiently, usually because of incompetent management. Strong, thriving companies rarely are targets for leveraged-buyout acquisitions — if things are going well, there is no incentive to sell the company. If the firms are publicly traded, they often are taken private, their stocks delisted from the exchanges, and then reorganized. Once the company has been returned to profitability, it is taken public again or sold to a private buyer, in the hopes of turning a profit on the deal.

As you can imagine, companies that are buyout targets often are in very poor shape, and reviving them is no small thing. Many of them go into bankruptcy. Product lines are discontinued, retail locations are closed, assets are sold off, and, almost inevitably, jobs are lost. Some never recover. When the restructuring is successful, reinvigorated firms expand, add locations, develop new products, and create jobs. That is the creative destruction of capitalism…

[T]o abominate Mitt Romney for having been a success at the business of investing in struggling American companies, connecting entrepreneurs with capital and producers with markets, is foolish and destructive. Republicans ought to know better, and the fact that Gingrich et al. apparently do not is the most disturbing commentary on the state of the primary field so far.

This is very different from attacking the attackers for merely attacking; the big problem is the form the attack takes. These people are supposed to be the principled conservatives; you know, the ones who don’t toss out their beliefs when it’s expedient.

So what’s happening here? These guys know that if they don’t raise their poll numbers and lower Romney’s pretty soon it’s going to be curtains for them. As a result, they’ve become the equivalent of the drowning man who, in his desperate efforts to save himself, clutches at people around him and manages to drag them down too. And that includes their own supposedly conservative principles, and may include Republican chances for victory this year as well.

Nice going.

[ADDENDUM: I don't usually listen to Rush Limbaugh, but today he's tearing into Gingrich for this. And Limbaugh is hardly a Romney fan.]

I fled the Democratic party many years ago. And one of the reasons was, I couldn’t stand the class resentment, the envy, the hostility to wealth, the cries of “Richie Rich!” And I hear them from conservatives, at least when Romney is running.

Go ahead, have your “bloodbath” in South Carolina. Make Romney the little guy in the top hat and tails, from the Monopoly game. Have your Santorum, your Perry, your Newt. They may carry something like four states in the fall, but at least they’ve never sullied their hands with — eek! — business.]

86 Responses to “Republican candidates against capitalism”

I’m with you here. While I think that such a line of attack was always imaginable from someone like Huntsman who says what the media wants to hear or even from Perry who is trying to cast himself as some sort of populist, from Newt Gingrich it should be seen as more evidence of his poor judgment and opportunism. If they wanted to make Romney look like the only sensible and responsible adult running, they’re doing a great job.

Jim Geraghty’s emailed Morning Jolt arrived first thing this morning and did a splendid job of beating up on the idiots and scoundrels. “If Mitt Romney’s opponents embrace the rhetoric of the Occupy Wall Street crowd any further, they’re going to start pooping on police cars.”

Many years ago one of my first successful long term investments was in a mutual fund – Mutual Shares. It was run by Michael price, an expert in buying troubled companies and turning them around. What he did was pretty much what Bain Capital did. It was quite different from most mutal funds because most funds don’t get involved in the management personnel or policies of their investments. Mutual Shares (Michael price) did and they were very successful. (Mutual Shares is no longer run by Michael Price and has become a run of the mill mutual fund.)

That’s one of the reasons why I agree with you that this line ofattack against Romney is not just an attack on the man, but on the way real investment and management of capital works. These people (Gingrich, Perry, Huntsman, Santorum) sound like democrats and are feeding some strategies to them. For anyone who understands investing and capital management it does make Romney look like the only adult in the room.

One of the big problems we have in our financial sytem as it has evolved is the issue of management compensation. This is not, however, an issue for government regulation. It is an issue of corporate governance and goes back to the very foundatioon of the corporate structure. Corporate owners (stockholders) hire management people to run their enterprises. The Boards of Directors (BODs) are then hired to keep an eye on the management and look out for the intersets of the owners. The BODs are failing in doing their jobs of reining in managements. There are many things that contribute to this, but mostly it is due to the fact that owners don’t stay informed about the issues and why the BODs aren’t doing their jobs correctly. Back in the 70s corpoprate managers began to put more insiders on their boards. Shareholders, for the most part, didn’t object so they became bolder. Then the idea of tieing compensation to prevailing salaries took hold. Now we get mediocre managers being paid “prevailing” levels of compensation that are out of whack with their actual contributions. About the only thing around that works to right that situation is the corporate raider or capital investment firms that do corporate rescues or reclamations like Bain or Mutual Shares.

Anyway, I don’t want the Republicans to sound like purveyors of class envy or doubters of what capitalism has created. It’s not utopia, but provides the best chance for the most people to advance their economic situation.

You have hit the nail on the head regarding corporate governance. Let me add to your complaintds about boards of directors; they have become world unto themselves. Many of them sit on multiple boards (Imagine JJ sitting of T’s board of directors and T sitting on JJ’s board),. Oh! No conflict of interest there!

As for Newt, although I remain a Newt supproter at this juncture I am sorely disappointed. The “mean and irascible Newt” rises again and it gives some pausae as to whether I want such a temperament int he White House. In focusing on bringing Romney down which sounds like the Democrats job they continue to ignore that the point of the matter is Obama. I don’t know how, after these intensely intraparty attacks, that they can turn about and support Romeny if he becomes the Republican nominee (as seems likely) without lookign like absolute fools. Perhaps Bachmann, Cain, Pawlenty and Daniels are lucky to have exited the circular firing squad.

Romney, despite his Rommunism, at least understands that profits are good, and losses are bad, and that the profit-motive is better than the loss-motive. Gingrich, Perry, and Huntsman look like complete idiots right now.

Reagan’s Eleventh Commandment, gentlemen. Learn it, live it. I’d much rather hear why Newt, Jon, etc. are good candidates than watch them spew on Mitt. And anyway it hands the folks in the White House all sorts of ammunition for the general election.

OH PLEASE!!!!! After Romeny went after Gingrich, and then said “If you can’t stand the heat, stay out of the kitchen”, we’re all supposed to cry for Romney now? F _ _ _ Romney! You guys are a bunch of hypocrits!

Capitalism is the economic system which results from liberty, and is supported by government securing property rights and enforcing contracts.

The problem is not that Romney made money, but the way he made the money. And that problem is not firing people and liquidating assets. The problem is the use of a crony-capitalist financial system to make money. Recall that Romney abandoned the hands-on “Bain Way” of management to focus on Leveraged Buy-Outs and making deals.

Romney’s contribution was by manipulations in the financial sector. There are certainly some financial services necessary for capital to flow. But was Romney merely providing a service (think Bailey Building and Loan), or was he using his control of wealth to gain control of more wealth (think Mr. Potter)?

Limbaugh abandoned the process of reason by complaining that Newt’s attacks could be made by Obama. Who makes the attack has no merit on the truth of the argument. Ad hominem. Is Romney a classical American entrepreneurial capitalist? Or is he a financier sucking wealth from the efforts of entrepreneurial capitalists?

If ad hominem is allowed, keep in mind Romney’s partnership with Goldman Sachs, KKR and the Carlyle Group. Don’t we have enough banksters in Washington?

Romney went after Gingrich, Gingrich goes after Romney. I get it. For example, in this post I completely ignored Gingrich’s misuse and misrepresentation of Romney’s quote about liking to fire people, which Gingrich truncated and used inappropriately although he knew Romney was talking about the consumer “firing” an insurance company if he/she doesn’t like it.

That’s tit for tat. It’s politics as usual. I don’t like it, but I wouldn’t be commenting on it if that’s all it was, because it’s so commonplace.

What I’m writing about here is Gingrich savaging principles he himself is supposed to hold dear, all for the sake of trying to save his own political hide. This is despicable in a completely different way.

And if you don’t see it, your dislike of Romney is blinding you to some very hard and nasty truths about Gingrich.

You say my love of Romney is blinding me, but to what? Nothing. You can’t describe it because it’s not there (and by the way I don’t “love” Romney; I consider him a flawed candidate, just less flawed than the others).

I know that Romney attacked Gingrich unfairly a while back. I don’t like it or admire him for it. And as I said above, if Gingrich had confined his attack to a tit-for-tat retaliation and left it at that, I wouldn’t be commenting on it at all.

But this is very different, in ways that I’ve explained now several times. You can’t counter that because it’s true—as even Rush Limbaugh, who can’t stand Romney and has led the charge against him time and again—acknowledges.

Let’s go back to the beginning here. Newt, and ONLY Newt, tried to maintain a positive campaign about the issues. Several of the other candidates who were getting their asses waxed by Newt ran a whole SHITload of negative ads against Newt that at a minimum bent the truth, and really damaged his campaign. Newt attempted to air his grievances, and was told to stop crying, and take it like a man. Romney even suggested that if he couldn’t stand the heat, he should stay out of the kitchen. So Newt comes out fighting, and now it’s wrong to fight. I fully support Newt’s attacks on Romney, and hope they continue. I hope he DESTROYS Romney.

Tom: ah yes, Newt the good guy tried so hard to be positive, and he was dragged kicking and screaming, against his will, into negativity of the worst sort. Of course, his history is that of a positive person who doesn’t like to attack people, and only Romney’s pernicious behavior made him do it.

I never confused conservatives with defenders of capitalism. Nor will I confuse Romney with a defender of capitalism. To defend capitalism you have to recognize that it’s based on men freely offering and buy goods and services. Inherent in this is the fact they may choose not to buy a good or service. With the health care act in Massachusetts, he showed he doesn’t understand that. I would feel more sympathy for Romney over these attacks if he had disavowed the negative attack campaign against Gingrich in Iowa. As it is, no candidate seems to be interested in the main goal – that of seeing Obama doesn’t get a second term, even if that candidate may not be the replacement.

Les: interesting that the individual mandate in the very liberal state of Massachusetts, which is probably the only time Romney did not “defend capitalism,” is enough to make you believe he is not a defender of capitalism in general.

I agree that Romney should have disowned those ads, however. But the ads themselves were garden-variety political bend-the-truth shenanigans.

This, I repeat, is different. And it’s not because it’s an attack on Romney. It’s because Gingrich, in his desire to win, has entered Obama-esque territory. I’m not surprised at Newt trying to get back at Romney. But I’m rather stunned at the way he’s doing it. I’ve never been a big admirer of Newt, but I’ve respected him for his conservative principles. He’s lost that respect.

I’m not a Romney fan (and live in such a heavily one-party area that it doesn’t really matter who I vote for, so I’m not obliged to have a favorite). But I’ve been disgusted specifically by the hay being made of Romney’s “I like to fire people” (or however it was phrased). Clearly he was talking about not having to keep accepting mistreatment from a company you’re paying. Nobody (except true socialists for whom there’s only one company) disagrees with that. If nothing else, it’s the gross abuse of language and logic that deeply offends me.

Mac: I agree that was bad, but the use and abuse of truncated quotes in an attempt to make them mean something other than what the person was actually saying is an old political gambit. I detest and despise it no matter who uses it. But it’s done all the time in politics.

I focused on the other attacks, though, the ones that seem more unusual to me in that (and I know I repeat myself) they are not just attacks on Romney, they are attacks on conservative principles regarding business and capitalism.

I’ll spell it out for you, so that you can see that for Bain Capital FRAUD was thematic.

Now I don’t want you to get your ego involved here, just follow a brief synopsis of a not atypical Bain takeover.

Sometimes it is true that Bain looked for what has been termed distressed companies.

But there’s another case that has been overlooked. Bain Capital also sought UNDERVALUED companies, which means companies that were NOT distressed, not underwater, not failing, in fact, succeeding, thriving if you will.

Bain Capital bought those companies using the value of the company itself as part of the purchase price. Bain might put up 25% of the actual purchase price, and acquire the rest on loans secured by the underlying value of the target company.

This has been termed a leveraged buyout.

Once acquired, Bain used the successful company to gain MASSIVE LOANS from banks, and these loans were quite APART from the loans taken to acquire the target company.

Now the banks would tender the loans because the company had value, ————— THIS IS TREMENDOUSLY crucial to understand ——————- Bain then used the massive amount of cash now on hand, {proceeds of the loans acquired} to pay massive dividends for Romney and his partners.

Meanwhile, the loans come due.

Romney and Bain declare bankruptcy, thus shielding themselves from any legal requirement to pay back the loans they acquired from the banks.

Which means Romney STIFFED the banks, and what’s more, INTENDED TO STIFF THE BANKS ALL ALONG.

That’s NOT Capitalism.

That’s fraud!

That’s BAD FAITH!

It is EXACTLY that kind of business activity that draws Capitalism into disrepute.

Now where are the employees in all of this drama? And again, the employees not of distressed companies, not of failing business ventures, but employees who thought their future bright because they were part of a succeeding business entity?

What happened to them?

Since when has Capitalism been understood, been synonymous if you will, with corporate raiding?

Since when has it been ok for all business activity that occurs in the private sector to be immunized from ethical review, all because such behavior occurred in the private sector?

This isn’t to say that for distressed companies such raiding might not have its place.

But what of successful companies, what of business entities that were thriving?

neo, I think Romney is a defender some notion of the “free market” (as are most conservatives) and is not a defender of capitalism nor of the morality of capitalism. That notion is flexible enough so that a conservative can agree there are instances where the government should help a business which is usually another guise of “crony” capitalism (and I cringe at having to use “capitalism” in that).

I can accept your point about his having to accept the individual mandate in Massachusetts if he thought now it was a mistake. From your prior writings, I think we have a fundamental disagreement about this. I think you find it acceptable because the decision was made at the state level. I find it unacceptable because there are some things any government, federal, state, county, local, town should not do because it encroaches on an individual’s rights.

Despite Obama’s bad poll numbers, I don’t think there’s enough negative feeling towards him to overcome the incompetency of the Republican field. I’m mentally preparing myself for another 4 years of Obama.

Ultimately, aren’t we as consumers responible for the layoffs? When we take our business from one average supermarket to Walmart, Sam’s Club, or Whole Foods, we don’t think about the poor workers who may lose jobs or hours at the store we used to frequent. When we stopped buying Keds for kids and started buying Nikes, did anyone think of the people who used to make Keds? When we become bored with a TV series, we have no problem changing the channel without a thought to the screen writers, actors or editors who may have to look for new jobs.

Companies that help other companies adjust to our changing tastes or other market forces can’t be blamed for the dynamics of capitalism. Gingrich is supposed to be the great teacher and thinker. Shouldn’t he be using his talent to educate the public? He certainly had the time to educate Freddie Mac.

neo,
Sometimes I’m content to set my conservative principles aside in order to watch someone get a good taste of their own medicine. As Romney once said, there are probable lines of attack in the general, so it’s important that we bring them out now.

Neo: right, I understand and I wasn’t disagreeing with you, just chiming in on what particularly irks me.

Though I guess broadly it all fits under the general plan of “any stick will do.” The two gambits have in common an indifference to truth (that is, assuming those attacking Romney’s capitalism actually aren’t hostile to capitalism).

Neo, you right on. I was getting a little excited about Newt as the guy who would take on the conventional wisdom, and as a guy who understood the country’s founding principles. Now, my nagging worries about Newt are coming manifest.

Rush Limbaugh is a consummate hypocrite. He was on an anti-Romney rant for weeks. I wrote to him and told him that even though he cares nothing for the GOP, his actions were going to hurt the Conservative movement in the long run by helping Obama. He never responded of course, and he kept up the tirade day after day. Now, he criticizes others who have simply following his lead. Bah!

Have you asked yourself how Bain Capital arranged for the loans to the target company?

No loan is made without a promissory note that stipulates the amount owed, the interest that will be paid, and of course something important for this particular thread. That would be a PROMISE to repay.

Note a promise to repay.

Not a promise to cash out and declare bankruptcy all at the first opportunity.

Not a promise to amass as much cash on hand as possible, so as to pay out as large a dividend as possible.

Have you asked yourself whether Bain had the target company disclose to the banks that they were intending NOT to use the money for genuine business growth, but for dividend payment?

Have you even thought through the particulars of how successful companies were targeted, how the funds necessary to purchase were acquired, HOW Bain retained the management as a corporate cut out so as to shield themselves from some unpleasant legal conundrums?

Because if you haven’t wandered through the thicket of corporate cut outs and fraudulent loan arrangements, if you haven’t done that, ————- why are you pronouncing upon the subject at all?

Have you done your homework here?

It doesn’t seem to me from anything in the lead post, or in the comment thread, that you’re prepared to discuss the particular ethical irregularities of corporate actors who arrange massive loans without any intention to repay.

Dan: I’ve certainly read about Romney’s time at Bain, and I’ve read critiques of it. I’ve not encountered anything that sounds like it’s anything other than standard business practices for leveraged buyouts. In fact, in some ways what Bain did appears to have been somewhat better than the usual practices in the field [emphasis mine]:

Romney soon switched Bain Capital’s focus from startups to the relatively new business of leveraged buyouts: buying existing firms with money mostly borrowed against their assets, partnering with existing management to apply the “Bain way” to their operations (rather than the hostile takeovers practiced in other leverage buyout scenarios), and then selling them off in a few years.

I’ve read a great deal more than the Wiki entry about it, as well, including critiques from the left, from people who have an ax to grind against Romney. I’ve not yet come across the facts you state in connection with Romney’s time there. Nor, by the way, were Gingrich’s remarks about Romney and Bain focused on those sort of accusations.

Of course, I’ve not done thousands of hours of reading on this, or even hundreds, nor am I an expert myself in the ways of the leveraged buyout. But I do notice that in your long comments you offer absolutely no links whatsoever to where you obtain your information. So I have no way to evaluate what you’re saying or on what you’re basing your assertions.

Rush Limbaugh is a consummate hypocrite. He was on an anti-Romney rant for weeks.

Romney earned a lot of it, not only for defending socialized medicine, but for other stuff, like hammering Perry for wanting to reform social security. But it is one thing to criticize Romney for his vices. It is a completely different thing to criticize him for his virtues.

Bain Capital isn’t a predatory vulture; it is involved in companies like Burger King, ToysRUs, Dunkin Donuts, AMC Entertainment, Burlington Coat Factory, The Weather Channel, etc. etc. Some companies can be rebuilt, some cannot. This mentality that everything that fails needs to be subsidized in perpetuity, and everything that succeeds needs to be taxed to death, will be the ruin of us all. We ought to be doing the opposite.

I really, really, really hate defending Romney, since he is clearly an opportunist, and wouldn’t hesitate to employ the same crap arguments against Bain if he was in the shoes of the other candidates. This doesn’t change the fact that fundamentally bad arguments are being tossed around.

This argument that Gingrich is using was used against Carly Fiorina (sp) in her bid against Barbara Boxer.

The Democrats and media made Carly out to be heartless (never mind she made HP more competitive and made strong business decisions)

Look people. You don’t have a RIGHT to a job.

If a venture capitalist firm makes the tough choice to take over FAILING companies (not companies that are doing well) and then make TOUGH choices to remove areas of the company that are holding it down or if the company ultimately STILL fails as it was going to anyway – how do you hold Romney or Bain capital responsible for the failure.

That is disingenuous.

What we need to do is see what these decisions of Romney’s were (such as was it removing very costly parts of a company to make it more competitive).

The companies were a risk.

For my thinking anymore now. None of us deserve to have jobs given our aweful way of thinking…

Lordy. We let Ohioanites reverse John Kasich’s reforms because we are idiots.

We let people in California stoop down to keep Barbara Boxer.

We (collectively) continue to make choices that are tearing this country apart.

AND BY THE WAY

This is from a commenter who actually rated Romney as 4th place. I wanted Cain, Bachmann, Santorum and then Romney.

Limbaugh is a bit too little, too late. His ceaseless attacks on Romney gave Gingrich, et. al. the cover and courage to go too far. Now he’s critical of the monsters he helped to create. Obama sends his thanks to all.

chuck: I really begin to wonder whether you and several other commenters here are reading-comprehension-challenged, and/or lack critical thinking skills.

Do you truly not understand the distinction I’ve made over and over, in the post and the comments section here, between typical political attacks (which all the candidates, including Romney, have indulged in) and what I’m actually criticizing Newt for here?

When I saw Newt’s line of attack, I thought that this was exactly the same as Sen Boxer’s attack on Carly Fiorina. Boxer is for “jobs jobs jobs” and Carly had laid people off from HP. Carly just assumed California voters would understand the basics of business, capitalism, freedom, etc., and she did not even bother to defend against this charge. I thought this a big mistake at the time. We are really, really stupid and ignorant out here in California.

Anyway, this episode puts Newt in a class with Boxer, the runner up for the stupidest federal elected official. She used to be the stupidest, but has been eclipsed in stupidity by Patty Murray.

Gingrich attacked from the left. He violated his claim to be conservative and undercut the Republican platform.

Romney attacked by lying. He violated his claim to honesty and undercut Republican unity. Comes the blowback.

They are both ambitious men. Neither is particularly honest and I don’t trust Mitt anymore than I trust Newt. I don’t know what either one really believes in. In Newt’s case I think that is because his beliefs are excessively flexible. In Romney’s case, I think that is because he is a technocrat dedicated to efficiency but without deep ideological convictions regarding liberty and such other esoteric things.

Complaining about “conservative principles” not being followed when
A. You’ve been informed for months that among the probable “front runners” including Rommney there isn’t a real conservative in the bunch
AND
B. The Mittster himself seems to be the worst kind of venture capitalist

Gingrich #1:
Romney is not very electable in a general election. Axelrod and friends will play nasty.

[gcotharn's notes: Given that Romney's supposed strong suit is his purpoted "electability", therefore Gingrich' raises a FULLY legitimate point. Axelrod would turn a general election into a referendum on Bain corporate raiding. Second, Axelrod would turn a general election into a smear campaign about Mormons and racism. There will be a third, fourth, fifth, etc. Romney does not inspire enough conservative passion to counterbalance Axelrod's assaults. Therefore, Romney IS NOT the most electable Repub. Those who believe he is ... are miscalculating.]

Gingrich #2:
Romney claims his private sector record is one of his major qualifications. I say his private sector record will damage him.

[gcotharn's notes: Romney has gotten away with lying about his private sector record; w/contantly referring to his private sector record ... w/o ever being challenged about it. For instance: Romney has claimed he created 10,000 jobs in the private sector. Untrue.]

Gingrich #3:
A specific example: Bain paid $31M for a company, then Bain took $180M out of the company, then Bain declared the company bankrupt. It is fair to criticize that; fair to ask Mr. Romney to explain himself.

[gcotharn's notes: it is fair. It is absolutely fair. It is fair to criticize specific actions: such does not constitute criticism of capitalism itself. There are many legal, capitalistic activities which I do not want a Repub POTUS candidate to have on his resume.]

~~~~~~~~~~~~~~~~~~~~~~~~

The statement which is attributed to Gov. Perry:
“If you are the victim of Bain Capital’s downsizing, it is the ultimate insult for Mitt Romney to come to South Carolina and tell you he feels your pain — he caused it.”

Is that statement really, truly an attack on capitalism? I think not. The statement is an attack on Romney’s supposedly sterling record as a successful businessperson, and is an attack on the ethics of a corporate raider who put $31M into a company, took $180M out, then declared the company bankrupt. Further, look at the qualifier: “If you are the victim of Bain Capital’s downsizing”. I do not see a problem with Perry’s statement: I do not see it as an abandonment of principle. I see it as rough and tumble, yet fair, campaigning. It is far more fair than when Mitt Romney’s surrogates went into a post debate spin room with a Dem talking point that Perry wanted to end Medicare protections for retirees.

Let someone else defend Huntsman. I will not expend time looking up exactly what he said.

~~~~~~~~~~~~~~~~~

Both behind the scenes, and on the stage, Mitt always acts as if he believes he has something to hide. Well, if he has nothing to hide: here is a golden opportunity to explain his principles; to persuade us voters as to the righteousness of his principles. My biggest criticism of Mitt is that he is a whore who will sell out his principles at the drop of one point in a private poll. Here is an opportunity for Mitt to persuade me otherwise. A crisis = danger + opportunity. Mitt has another opportunity to win voters over to his side. Will he, this time, seize it?

The two great political ideas are liberty and equality. Democrats are the party of equality and Republicans are the party of liberty. Capitalism (Bain) is a product of liberty. To in essence attack this fundamental principal dear to most Republicans as Gingrich has done, is akin to Obama attacking unions, public and private. The only good coming out of this, is that it will accelerate Romney’s preparation for the Obama attack that lies ahead.

Ron Paul showed he is a classy fellow by criticizing the attacks on Romney about his term at Bain and the quote taken out of context. Real capitalism (unlike our current system of crony capitalism) is a competitive, dog eat dog affair. You either make money and succeed or you lose money and fail. You seek to gain market share or market share is taken away from you.

Newt and the rest made a big mistake with this attack on Romney. They definitely sound like bleeding heart, goody two shoes liberals. That will not play well with the majority of fiscal conservatives and independents that understand that capitalism is what made America great.

gcotharn: the issue for me has nothing to do with the electability question. That’s completely separate.

And I hope Newt’s not pretending that he did this for Mitt’s own good, to help him out.

I’d have had no problem with it if Newt had stuck to specific criticisms of specific abuses or illegalities that Romney had committed at Bain. But Gingrich did not, as far as I know (was the example #3 above something that occurred under Romney himself? I’d like a link, because so far, all the allegations I’ve seen of that nature occurred some time after Romney had left). I noticed when I listened to that part of Gingrich’s statement that refers to example #3, he cites an unspecified article in the WSJ and an unspecified company, without any dates. What’s he referring to? Do you know?

Did you not see quotes from Gingrich like the one I mentioned in my comment at 7:42 PM above?

A technical point of clarification: in your second 7:42 link: the Daily Beast characterizes Newt’s criticism of corporate raiding … as being criticism of Romney’s “like to fire people” comment. You read the Daily Beast’s article as they wanted you to read it, yet they mischaracterized the truth. In the Morning Joe video which I linked at 7:37 : Newt defends Romney re the “like to fire people” statement; says Romney’s statement is being unfairly misrepresented; cites the misrepresentation as an example of unfair campaign tactics.

Gingrich, operating out of fury and stings to his pride, has shown why his character prevents him from becoming a good president. Even though his head is in the conservative camp and even though it would be fun to watch him in a slug fest with Obama, his heart is too full of itself to be anything other than a tyrant and a dictator if given the chance. A Cincinnatus like Washington he is not. Power corrupts and for Gingrich, you can literally see him choosing the fires of Hell rather than surrendering his will to power.

I’d vote for Santorum first, then Perry, then, I could, and would, heartily vote Romney in the general, if needed.

gcotharn: agreed that Newt disavowed that connection, and criticized the use of the truncated quote (although I just saw that fairly recently; but in this post that was not the focus of my criticism to begin with). And I wasn’t putting up that link because I agreed with every statement in it. That is almost never the case. I put it up for the Newt quote in it I was referring to with the phrase “this statement.”

I’m trying to understand how Dan’s description of Bain’s tactics could work much more than once. I just don’t think the banks that Bain would secure their leverage funds from would be so stupid as to allow themselves to be screwed time after time. Just doesn’t make sense to me. In other words, I can’t swallow Dan’s version of things.

I think it bears pointing out the the Republican Party isn’t really the party of capitalism. There is a large segment composed of social conservatives, many of whom would be Democrats if the Democratic Party hadn’t antagonized them and driven them out. Santorum would be such, as well as many in the South. There are the business Republicans, who used to be well represented in the NE. And there is a smattering of Libertarians, who probably aren’t dedicated Republicans at all, but rather see it as the least evil party at this time. And there are the patriots. Given that the Democrats snigger at such childish things, the patriots are also driven to the Republicans. Reagan managed to appeal to all of these groups to some degree, but no one since has done that as successfully.

If the Republican Candidates seem ideologically heterogeneous, it is because the Republican party is itself mixed. It is in flux, hence the many candidates and the lack of a united front.

Thank you, neo. Thank you for expressing the thoughts and feelings that have come to make me more than a little angry. I was aware of much of what you wrote — which is why I’ve just been getting angrier and angrier.

I think Newt Gingrich shot himself in the foot (which, come to think of it, follows his very own tradition!) So much for the kinder, gentler Newt who “is a grandfather now.” The new Newt, is the old Newt. May be even more thin-skinned, angry, and sure to be bitter.

Now I’ll start reading thru the other posts…..61 as I write! 61 ??!!! Neo, I think you hit a sore spot with a lot of people!

P.S. The race was called for Romney about 10 minutes ago. Looks like Fox’s special New Hampshire broadcast will be a lot shorter than expected!

It’s stunning that so much of the commentary that I’ve read on varous blogs and media sites on this subject is wrong. Capitalism and finance are not synonymous.

Just because one believes that the capitalist economic system is the best system for generating prosperity and raising living standards within society, it does not mean that one has to accept that all businesses that operate within a capitalist system are “good” or require a supporter of capitalism to defend them.

Let’s say that instead of Romney running a private equity firm, he had spent his career in a different kind of finance firm. For example, let’s say he spent his career building a chain of pawn shops or pay day loan lenders. Now suppose that in the heat of a political campaign Gingrich criticized Romney for operating a business that profits on the backs of minorities, the poor, and the underprivileged (which is generally true).

Would all these people continue to say that Gingrich somehow compromised his conservative principles just because he criticized Romney for owning a bunch of pawn shops and pay day loan lenders?

I doubt it.

Larry Flynt, the publisher of the porn magazine Hustler, once ran for president. If one of his political opponents criticized him for his choice of business, would that be an assault on capitalism or a compromise of one’s conservative principles?

No one—at least, not me, anyway—would have been upset if Gingrich had (as I already wrote at 7:50 PM) offered specific, pointed criticisms of specific illegal or unethical practices at Bain under Romney’s watch. He certainly did not initially do that, and so far I’ve not heard him do it, although he may dig something up before he’s through. Instead, he made blanket statements criticizing laying off people in a failing company, and used words like “looting” without backing it up. Demonization of perfectly ordinary and legal business practices in the field of leveraged buyouts. A real page out of the liberal/leftist Democratic book.

Scott: I don’t see the similarity in your porno comparison. For example, if a social conservative who believed pornography was bad had criticized Flynt for being in the porno business it would make sense. But that’s not what’s happened here. Unless Gingrich’s platform and policies have been against leveraged buyouts as a practice in general (which he’s never been against before, as far as I know), he should not be speaking against Romney for being with Bain unless Gingrich has specific complaints against things Romney himself did while there.

Scott, that would be an attack on capitalism. What is being implied is that there are some businesses which are morally wrong. In a capitalistic society people are free to choose how they wish to make a living (with the usual caveat about not causing physical harm to a others). For someone to attack that choice means the attacker wants to restrict the market according to his own social values and prevent a capitalistic economy.

neo-neocon: I did not read all of the previous comments. I was responding to your post. And this was what I considered the “meat” of it:

“I can’t recall a time when the attack featured statements that violated basic principles that the attacker and his/her party were supposed to stand for—such as, for instance, knowledge of what capitalism is…”

And my point is that one can certainly be a supporter of capitalism and still make a value judgment about different kinds of businesses.

And I thought that is what Newt did. He was making a value judgment about Romney’s activities at Bain. I agree that the “looting” comment was over the top.

I’m not defending Newt. He took a cheap shot for political purposes which was clearly motivated by revenge after Romney went after him so strongly in Iowa.

It’s not so much that capitalism is good but that man is, well, challenged. The challenge seems to work out for every one’s best under capitalism but let’s not forget that social conservatism, funded by religous texts, namely Torah, is not the system of control in the age to come. That age is a kingdom where rule is a rod of iron and describes not individual liberty but submission. Ironic that the perfect system promised in Torah more resembles what the progressives are trying to accomplish. Perhaps that is one reason why Jews so align with leftist causes and means.

“I’m not defending Newt. He took a cheap shot for political purposes which was clearly motivated by revenge after Romney went after him so strongly in Iowa.”

Newt is a loose cannon. A self-proclaimed small government conservative who takes millions in consulting fees from Freddie/Fannie for providing a judgement on the soundness of Freddie/Fannie and then turns around and criticizes a hedge fund executive is a yellow belly rabid dog.

“And my point is that one can certainly be a supporter of capitalism and still make a value judgment about different kinds of businesses.”

The pertinent question is did Romney/Bain do something illegal? If so, please provide verifiable info and I’ll agree that fraud occurred. Otherwise….

Lets see if I have this right: Gingrich is a bad boy because he “took a cheap shot” after Romney took a cheap shot at him. But Romney is not a bad boy because taking a cheap shot at Gingrich was just politics. Right?

I was practically foaming at the mouth as I saw newt spewing this crap, in his comments about fairness all I could think was Newt just joined Occupy Wall Street.
He will never be able to distance himself from these comments. He needs to quit the race as soon as possible, Perry right behind him. I cant support either after this. I am not a Romney fan but I will support the nominee, Anybody but Obama!

Parker has it exactly right. Over and above being a loose cannon (the same one that is supposedly now a different man (yeah, married to a different woman) who now goes to a different church (converted to Catholicism) where he has claims that “he went to G-d for forgiveness” of his past transgressions) and, remember, now he’s a grandfather, too. That’s different.

He also is a major hypocrite. For all his brilliance and all his meticulous planning for this run (at least 1/2 a decade) he still is as much of a loose cannon and in his hurry to shoot back at Romney after his thin skin was burned by negative ads in Iowa, Gingrich didn’t think too much before he decided upon his target of Bain capital run by Romney.

Wonder how much Gingrich was paid as an advisor to Forstman Little — you know, the private equity firm — where he served on the Board.

Not only is he transparent as rain, but he was so focused on swift revenge that he shot himself in the foot by revealing that the carefully contrived “new Newt” is but a complete fiction.

Let us hope that the same thing that repulses some about Gingrich repulses those who embrace Obama. And, I stand by the adage that pride comes before a fall. Hopefully, this is the same thing that reveals Obama. He may not be as smart as Gingrich, but he more self aware and it will take more than cheapshots to take him down. Truth, unrefuteable truth, is the antitdote. When and if Obama is defeated, it will most likely be something like Nixon, the President he most resembles in character. Or next, he may go down like Wilson, in sickness and illness, the next President he most resembles.

I have to agree with the majority sentiments expressed here. I am especially disappointed in Gingrich, who has crashed and burned like an old Aeroflot jetliner whose maintenance wasn’t properly kept up by the comrades with guaranteed lifetime employment regardless of their incompetence. (Good God, how did I come up with THAT analogy?!) Still, I think it’s a real stretch to say that thinking people who have been concerned about the frightening direction the country is going in will be swayed against Romney because of the desperate ankle-biting he has had to endure over the last few days, and conclude that Obama is still the best choice for president. This is a bit like arguing that because the girl next door isn’t a perfect “10,” it’s better to go out on a date with Helen Thomas.

The views of the zombified hard Left are mostly irrelevant here. They are as predictable as misogyny in a Muslim country (and about as pleasant). But the more moderate Obama supporters who allowed themselves to be fooled in 2008 into thinking he was himself a moderate are not likely to go back to him, given what they have come to realize about the magnitude of their mistake. I personally know of two people who answer to this description, and I can’t imagine them ever voting for Obama again.

The group that I worry about are the economically illiterate boneheads. This is a pretty large constituency, many of them young people, and they voted overwhelmingly for Obama, as one would expect them to. Most of these people, I suspect, were simply caught up in the historic excitement of voting for the first Black president. That kind of excitement is a one-time event. It is not going to repeat itself in 2012, so hopefully much of the emotional incentive the Silly People had to vote for him has evaporated and many of them will stay home on Election Night, and watch re-runs of “Law & Order.”

If we must look at this election as a contest between a greater and a lesser evil, then let those of us whose brains have not been putrefied by Leftist dry rot, or turned into scrambled eggs by daily entrees of Sanctimonious Stupidity a la Joy Behar, be clear about one thing. The evil inherent in Obama’s policies and in the content of his character are orders of magnitude worse than any shortcoming of Romney’s.

The rub is they are not all failing. Their stock is just undervalued enough to make a hostile takeover worthwhile.

I work for a company bought by another group with some strong ties to Bain. We never lost money. We were sold for top dollar by our parent using a structured deal that leveraged our assets to help pay for our sale to our buyer. Econ slow down hits and we (and the buyer) go bankrupt because of the debt load the buying set up. Court discharges some debt and we return to being profitable but now stock is in the tank… so we end up being bought in a hostile takeover and are waiting for round three of lay offs.

I’m pro free market but buying up companies like ours and laying everyone off is not a service to the economy. We always had a viable product and always made money…

Abdul7591 — I loved your post!
(Tonight I think we saw real evidence of strength of independents — many of whom were those silly people who got too caught up in whatever and voted for Obama instead of thinking. Period.

And I think Romney is the perfect choice for those people. Not too extreme on either side which would just guarantee more ideological agendas instead of prioritizing the welfare and safety of the U.S. and it’s citizens. Apparently his primary reputation has been the ability to progress via concensus building,- which is, and has been for some time, a huge void in DC.

And according to exit polls, the strongest motivation for NH voters was beating Obama. I can live with that!

thomass, have you ever considered that the tribulations of your company were economy-driven and not driven by who owned your company? Certainly over-leveraging has led to downfall of many companies that were bought out with bad risk management and over confidence that debt service was manageable. Not sure what type of business(es) in which your company is engaged, and whether it has a domestic or global consumer base, but economic volitility as that we have thus far experienced, and will no doubt continue to experience for some time (if not more, largely depending on Europe and how it addresses its various countries’ debt loads). There are many companies that underwent leveraged buyouts with great turnaround success, and ultimate growth even if they first had to go through paring down, selling off assets or spinning off non-essential businesses, or even bankruptcy reorganization. Change of ownership is not an inevitable determinant factor.

Atta girl, Neo…stand up and fight these folks who apparently know nothing about how to run a profitable business.

As I have said before, laying people off in a dying company often saves the jobs of the people who didn’t get laid off. And usually the ones left are the best workers who contributed the most to the business.

And anyone who says you are in the tank for Romney hasn’t been reading your blog with comprehension.

Concerning not buying Nikes to preserve jobs for people who worked for Keds, does that mean we shouldn’t have bought automobiles to preserve the jobs of people who worked for buggy whip makers?

it depresses me to read through these comments and see so many people who have trouble grasping Neo’s point. seemingly smart people too. we have this one chance to defeat Obama and save our Republic and our way of life. Please, people. Don’t blow it. i don’t want to grow old and die in a once proud nation with a 3rd world economy.

I’m in agreement with NEO. Since I can’t add more to her argument, I’ll just ask:

How many jobs has Obama killed through his governance?

For example, how many jobs in the Gulf Coast were destroyed because his admin stopped issuing offshore drilling permits? How many jobs has the EPA killed, and will kill in the future? What impact does Holder’s insistence on denying states the ability to fend off illegal immigration have on the ability of Americans to get entry-level jobs? And then there’s Obamacare…

You make some good points that clarify what bothers me about the argument for “creative destruction”. Finance and production/services are different sectors. It is one thing to fix up a broken company and make it viable, it is another to use a healthy company as collateral in a loan that enriches a third party. Finance and production have different goals and it has often been such. Vanderbilt beat Wall Street at its corrupt game back in the 1870′s, and the new oil/railroad/steel industries did much to advance the country. People like Carnegie were obsessed with production and making goods cheaper. But for the last fifty years it has seemed to me that too much of the financial game has been about gambling the neighbour’s house in the hope of making a winning, I don’t see that sort of game as magically leading to productive outcomes. And that is especially so when the government covers the losses.

I’ve just watched the Bain film in its entirety, and it is, indeed, a major hit piece–complete with repeated pictures of barbed wire enclosed, padlocked, deserted, trash strewn, shuttered buildings and empty employee parking lots, Romney getting into limos, traveling on a private jet, and having his shoes shined by someone stooping over him while Romney sits at ease in a chair in front of a corporate jet, lots of Jingoism–Romney repeatedly speaking French, and talk of Bain being financed by South American investors, mustached fat cats smoking big, fat cigars, or well-dressed white executives triumphantly holding up dollar bills and smiling, but mostly, maudlin interviews with a half dozen or more of what appear to be not very well educated workers, who were fired when some of the companies that Bain bought were closed, and who were and are very bitter and upset.
Sad for them, but that is how it goes in a Capitalist society.

I well remember when a manufacturing company I worked at, at my first real job, was bought out, the founder given a major block of stock in Motorola and retained as a one or two day a week “consultant,” and then, about six months later, the day I returned from my honeymoon, I and about a quarter of the workforce were “laid-off” all on the same day—willy-nilly, good workers and bad, scientists, executives, and guys who mopped the floors, and even the old, illiterate Italian worker who had been with the company since its inception as a two man outfit in a garage decades ago was fired, quite heartlessly, just a few days before he was eligible for his pension, and this was before ERISA so he got nothing for his decades of work , then my new wife—who worked at the same company—was laid off three weeks later; all this occurring at a time when the country was in the midst of an economic downturn, and there were just no jobs to be had. Luckily, as a veteran, casting about for what to do, I was eventually able to enroll in college.

There was also a lot of talk in this film about Romney’s wealth and greed, “Occupy “ types yelling “corporate greed,” pictures of his two or three several million dollar houses (in the film a worker who was fired and lost her home is mad that he has “15” houses), and how Bain would invest in a company, temporarily increase profits by cutting its workforce and increasing productivity, jack up its stock price, load it down with debt, then sell the company, or dump its stock, and make hundreds of millions of dollars in the process. It may not be pretty, but is it legally or morally wrong in a Capitalist society?
It seems to me that the essential question is not, did Romney make a lot of money, or even if Bain’s tactics were unusual or extraordinarily predatory in a Capitalist society but, rather, is Romney telling the truth that he created a net of 100,000 jobs, even though some workers were fired in the process.

P.S.–That bloodbath was quite a scene–people would get a phone call, get a weird expression on their faces, and just leave and not come back, The rough, raucous crew of older women in one manufacturing operation got escorted out of the building by rent-a -cops and were not allowed back in but had the contents of their lockers brought out to them, Sobbing Secretaries stumbling though the halls. The young woman who was Assistant Personnel Director called you in, there was a huge stack of personnel files on he desk, she pulled yours off the pile, gave you a canned “exit interview”–I was a young, polite young man, and perhaps my memory lies, but I believe when she asked me the first question, about what my opinion was of the company, I believe I told her to do something that was anatomically impossible.

There is some justice in the world, though, because I heard later that, at the end of that day, when she had done all the dirty work, the Personnel Director called her in and laid her off, too.

As you might expect this experience soured me on working in the private sector.

About Me

Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon. Read More >>